European pension funds massively withdraw from U.S. Treasuries, fiscal risks become a trigger for investment decisions

Recently, major European pension funds have implemented a series of significant adjustments, clearly reflecting the deep concerns of global institutional investors about the fiscal health of the United States. This trend marks an important shift in the international capital allocation landscape and serves as a reminder for market participants to pay attention to potential economic risk factors.

Sweden’s Pension Fund’s Proactive Withdrawal

Sweden’s large pension fund Alecta made bold investment adjustments in early 2025. According to NS3.AI data analysis, the fund has withdrawn between $7.7 billion and $8.8 billion from the U.S. Treasury market since the beginning of the year. This decision was not made impulsively but based on a rational assessment of the ongoing expansion of the U.S. federal deficit and macro fiscal sustainability. As a management-scale pension fund, every step of Alecta’s investment strategy adjustments represents a professional judgment of risk by institutional investors.

Danish Peers’ Follow-up Signals

Following suit, Denmark’s pension fund AkademikerPension also announced similar strategic adjustments. The fund stated it would gradually exit its entire position in U.S. Treasuries, involving a capital scale of $100 million. This coordinated move further reinforces the consensus among European institutional investors—that the uncertainty of U.S. fiscal policy has become a significant investment risk factor.

Common Concerns Among European Institutional Investors

Behind these measures lies a collective shift in perception within the European pension fund industry. As conservative institutional investors, pension funds prioritize the safety of their capital and long-term return stability. The accelerated growth of U.S. federal debt, structural expansion of fiscal deficits, and policy uncertainties have prompted these European pension funds to reassess the safety of U.S. Treasuries. The phenomenon of large capital outflows from the U.S. Treasury market essentially reflects the risk-averse psychology of institutional investors.

Capital Transfer Amid Geopolitical Tensions

It is worth noting that these pension fund withdrawals occurred precisely amid increasingly complex global geopolitical tensions. Escalating international conflicts have further amplified investors’ concerns about global economic stability. Against this backdrop, the actions of European pension funds not only reflect doubts about U.S. fiscal health but also represent international institutional investors seeking safer and more diversified asset allocation paths.

Overall, this large-scale withdrawal by European pension funds signifies a profound adjustment in the global capital markets’ understanding of U.S. fiscal sustainability. In the future, similar pension funds may continue to review their Treasury allocations, which could have a far-reaching impact on the structure of international financial markets.